Saudi Arabia’s Public Investment Fund (PIF) has obtained a $15 billion revolving credit facility for general corporate purposes, which replaces its previous $15 billion revolving credit facility that it agreed on in 2021.
This facility has a duration of three years and is extendable for up to two additional years. The PIF signed the facility agreement with a diverse global syndicate of 23 financial institutions from Europe, the U.S., the Middle East and Asia.
A revolving loan is one that the PIF can draw, repay, and draw again during the lending period.
Debt to fund transformational projects
The PIF started raising bank debt in 2018 with an $11 billion facility, and in 2019 with a $10 billion loan which it repaid last year. The new loan replaces a similar $15 billion multi-currency revolving credit facility that PIF signed in 2021 with a group of 17 banks, providing quick access to cash when the fund needs it.
“The financing reflects PIF’s strong credit rating as well as robust demand from PIF’s relationship banks and financial institutions. Signing this facility represents a continuation of PIF’s strategy of using a diverse range of financing instruments,” the fund noted in a statement.
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PIF’s sources of funding
Loans and debt instruments are one of the fund’s four sources of funding. The other three are capital injections from the government, government assets transferred to PIF, and retained earnings from investments. The PIF is currently rated A1 by Moody’s with a positive outlook, and A+ by Fitch with a stable outlook.
With an ambitious program to deliver Vision 2030, the fund invests in projects, companies, and partners to diversify the Saudi economy. In addition, it aims to stimulate growth in major sectors and create new opportunities for investment and employment. Since 2017, PIF has established 95 companies and injected at least SAR150 billion annually into the local economy.
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